What This Week’s Bank Earnings Really Tell You (And What to Buy Instead)

Keith Fitz-Gerald Jul 20, 2019

Earnings season is now in high gear and, as I suggested may be the case, the numbers are coming in stronger than expected.

We talked about Pepsi last week, but the news this week was all about the big banks. Goldman Sachs Group Inc. (NYSE:GS) blew the doors off Wall Street’s expectations, posting earnings of $5.81 versus the $4.89 analysts had on the board. JPMorgan Chase & Co. (NYSE:JPM) posted earnings of $2.82 versus estimates of $2.50.

As usual, though, the real story is something entirely different.

Goldman Sachs and JPMorgan Chase highlight solid momentum: healthy confidence, solid jobs, rising wages, and so much more. The consumer, to a point we talk about frequently, is stronger than the headlines suggest. But that’s not the real story, and that’s, as usual, where I get really concerned.

Especially when it comes to debt.

Credit card sales, according to JPMorgan Chase CEO Jamie Dimon, reflect healthy consumption, but I think they reflect something far deeper and far more sinister.


(Click here)
Key Takeaways:

  1. Consumer debt reflects a deeper problem, not success.
  2. The Fed couldn’t tell you the truth if it wanted (but I will)
  3. Why rates don’t matter like people think

Until next time,


Keith

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